What does closing a position mean?

Closing a position refers to executing a security transaction that is the exact opposite of an open position, thereby nullifying it and eliminating the initial exposure. Closing a long position in a security would entail selling it, while closing a short position in a security would involve buying it back.

What is a closing transaction?

1. Any transaction that closes a position, especially a long position. 2. An option buyer's sale of a second option that cancels out the provisions of the previous option by having the same provisions. Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved 1. The final transaction for a particular security during a trading day.

Can a Crypto Trader close only a portion of a position?

Also, an investor may purposely close only a portion of his position. For example, a crypto trader that has an open position on three XBT (token for Bitcoin), may close his position on only one token. To do this, he will enter a sell order for one XBT, leaving him with two open positions on the cryptocurrency.

When do you close out a trading position?

For example, day traders generally close out trading positions on the same day that they were opened, while a long-term investor may close out a long position in a blue-chip stock many years after the position was first opened.